Perry lies about foreign creditors
Texas Governor Rick Perry, who is clearly testing the waters regarding a presidential bid though he promised Texans he wouldn't before they re-elected him last November, told a Republican gathering in New Orleans over the weekend that Texas doesn't have "some foreign creditor to finance deficit spending" like the federal government does. Wanna bet? By selling off Texas' public buildings and roads to foreign corporations like Cintra and Balfour Beatty, Perry and the Legislature are clearly making future generations of Texans pay for a bailout of lawmakers for their chronic underfunding of and raiding of highway funds. Entering into public private partnerships for every sort of infrastructure is the flavor of the month that lawmakers turn to in order to hawk-up our public 'assets' (like taking out a second mortgage) to get quick cash rather than match spending with revenues or end gas tax diversions for non-road purposes. In other words, PPPs give politicians a get out of jail card to engage in spending beyond their means, using the same 'foreign creditors' that Perry denounced.
For more on the bills passed that allow this, go here. Also, Texas currently has 20 deals in the works with none other than China.
Texas defers its responsibilities more than Perry would have America believe
Jason Embry, Commentary
Published: 7:25 p.m. Monday, June 20, 2011
Key to Gov. Rick Perry's I-may-be-running-for-president summer tour is the contrast he draws between the way Texas and federal officials write their budgets.
"In Texas, we believe that you can't defer tough decisions for tomorrow's generation," Perry told Republican activists in New Orleans on Saturday. "And unlike Washington, we don't have some foreign creditor to finance deficit spending."
You've got to give him that second part. The two-year state budget that lawmakers wrote this year is balanced, and it doesn't rely on foreign creditors.
The first part of Perry's statement, however, isn't so simple. Texas may not be deferring tough decisions to tomorrow's generation, but it is deferring them to tomorrow's Legislature.
To start, lawmakers are putting the finishing touches on legislation that would defer about $2 billion in payments to school districts until the opening days of the next budget cycle. This accounting trick has broad support in the Legislature, and for good reason. It gives lawmakers a chance to free up more money for the rest of the budget this year, but schools get the money soon enough in the next budget cycle to prevent any major disruptions. Still, it is a way to avoid the tough choice of balancing the budget with spending cuts alone.
But the more significant issue is that legislators balanced the budget by leaving almost $5 billion in expected Medicaid costs unfunded.
Medicaid, which provides health care for the state's poorest residents (mostly children and elderly people), is a required program that uses state and federal dollars. The Texas version provides some of the least generous benefits in the country.
The Legislature is supposed to fund Medicaid over the next two years based on how much state health officials say it will cost, but this year lawmakers decided to pay only part of the bill. That decision may have allowed lawmakers to prevent even deeper spending cuts or tax increases, but it also means lawmakers will find a $5 billion invoice waiting for them when they arrive for the 2013 legislative session.
Lawmakers also avoided any real discussion of the long-term deficit in the tax structure that will indefinitely complicate efforts to invest in Texas schools, colleges and universities.
Senate Finance Committee Chairman Steve Ogden, a Bryan Republican who is perhaps the most candid state official who has any real power at the Capitol, told the Houston Chronicle that this year's Legislature "basically kicked the can down the road in almost every area."
One other note about Perry's speech in New Orleans: Before he started talking about deferring tough decisions, he bragged that Texas had left $6 billion in the rainy day fund. If anyone is still wondering why Perry so strenuously resisted spending that money to cope with this year's shortfall, even though he had advocated using rainy day money in previous years, you just got your answer.